ORD 16-815 - Grantingt Lakehaven Utlity District FranchiseORDINANCE NO. 16 -815
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF FEDERAL
WAY, WASHINGTON, GRANTING LAKEHAVEN UTILITY DISTRICT, A
MUNICIPAL CORPORATION, A NONEXCLUSIVE FRANCHISE TO
OCCUPY THE RIGHTS -OF -WAY OF THE CITY OF FEDERAL WAY,
WASHINGTON, THROUGH THE FRANCHISE AREA FOR THE
PURPOSES OF CONSTRUCTING, MAINTAINING, REPAIRING,
RENEWING, AND OPERATING A WATER AND SEWER SYSTEM
WITHIN AND THROUGH THE CITY OF FEDERAL WAY AND
ADDRESSING HYDRANT COSTS WITHIN CITY BOUNDARIES.
WHEREAS, Lakehaven Utility District and the City of Federal Way have determined that it
is in the best interests of the public and both parties that Lakehaven Utility District be granted a
franchise from the City of Federal Way, in order to specify the rights and duties of Lakehaven to
install, operate and maintain a water and sewer system including all related appurtenances located in
certain rights -of -way as depicted in Exhibit A; and
WHEREAS, RCW 35A.47.040 permits the-City of Federal Way to grant nonexclusive
franchises for the use of public streets, bridges or other public ways for, inter alia, poles, conduits,
tunnels, towers and structures, pipes and wires and appurtenances thereof for water, sewer, and other
private and publicly owned and operated facilities for public service; and
WHEREAS, in granting such a nonexclusive franchise, the City of Federal Way reserves
such other powers and authorities granted to Washington code cities by general law; and
WHEREAS, the parties acknowledge the Washington State Supreme Court's ruling in Lane
v. Seattle that the cost of hydrants is a general government responsibility; and
WHEREAS, Franchisee recognizes a benefit to its rate payers in not having the City attempt
to assume its jurisdiction under the provisions of RCW Chapter 35.13A,
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NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY,
WASHINGTON, DOES HEREBY ORDAIN AS FOLLOWS:
Section 1. Defmitions
Where used in this Franchise the following terms shall be defined as follows:
1.1 "City" means the City of Federal Way, Washington, a municipal corporation of the
State of Washington, and its respective successors and assigns.
1.2 "Council" means the City of Federal Way Council acting in its official capacity.
1.3 "Director" means the Public Works Director, or designee, of the City of Federal Way
Public Works Department.
1.4 "Facilities" means all structures, antennas, equipment, pipes, mains, hydrants, valves,
meters, service lines in the right -of -way manholes, clean outs, and all other related appurtenances
owned or used by Franchisee and necessary for the distribution of water and collection of
wastewater. The Parties acknowledge that the Franchisee deems sewer service lines to be owned by
the property owner served by the service line.
1.5 "FWRC" means the Federal Way Revised Code.
1.6 "Franchise Area" means rights -of -way for public roads, streets, avenues, alleys, and
highways of the City as set forth in Exhibit A. Exhibit A may be updated by the City upon the City's
acquisition or vacation of rights of way and upon any annexation of area that is within the
Franchisee's service area.
1.7 "Franchisee" means Lakehaven Utility District, a municipal corporation, and public
utility, and its respective successors and assigns.
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1.8 "Revenue" means the value proceeding or accruing from the performance of
Franchisee's water and sewer business, which for the purposes of calculating the Franchise fee
contemplated in Section 17, shall include only those proprietary water and sewer rates collected from
Franchisee's retail customers with billing addresses that are within the corporate boundaries of the
City. For the purposes of this definition, "revenue" shall not include the following: wholesale or
contract water sales; maintenance charges for sewer systems not owned by Franchisee; hydrant meter
water sales; penalties; late fees; meter shut -off or turn-on charges; impact fees; delinquent account
charges; lien charges; telecommunications site lease payments; permit fees; surcharges; interest on
fund balances; revenues from hydrant maintenance (fire suppression); connection charges; water or
sewer system capacity rent; assessments; grants; contributed assets (contributions in aid of
construction); loans; developer charges; income from legal settlements not related to retail water or
sewer service; income from real property or equipment/vehicle sales; fees charged for Franchisee's
services as expressed in Franchisee's Fees and Charges Resolution; street light revenues; labor,
equipment, and material charges; or any other revenues that are not derived from the rates charged
for the direct provision of water and sewer service to retail customers with billing addresses that are
within the corporate boundaries of the City.
Section 2. Grant/Acceptance
2.1 Grant of Franchise. The City does hereby grant to Franchisee, subject to the terms of
this Franchise, the right, privilege, authority and franchise to:
(a) Lay, construct, extend, repair, renew, and replace Facilities in the Franchise
Area; and
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(b) To charge and collect tolls, rates, and compensation for such utility service
and such uses.
2.2 Acceptance by Franchisee. Franchisee shall have no rights under this Franchise, nor
shall Franchisee be bound by the terms and conditions of this Franchise, unless Franchisee shall,
within sixty (60) days after the date the City Council passes this Franchise, file with the City its
written acceptance of this Franchise and all of its terms and conditions.
Section 3. Conditions of Use
3.1 Non - Franchise Area City Property. This Franchise does not and shall not convey any
right to Franchisee to install its Facilities on, under, over, across, or to otherwise use City -owned or
leased properties of any kind outside the Franchise Area, or to install Facilities on, under, over,
across or otherwise use any City owned or leased property within the Franchise Area other than
public roads, streets, avenues, alleys, and highways of the City. The Franchisee shall place Facilities
within the Franchise Area, but not on any other public property owned, in whole or in part, leased, or
otherwise occupied by the City unless an easement is granted.
3.2 Termination of Easements. Franchisee agrees to voluntarily relinquish its easements
on private property that has become City property pursuant to public projects when notified by the
City. In exchange for the voluntary relinquishment of easements on private property that become
public right -of -way, the City and Franchisee agree to the following:
A. For the Project. The City agrees to pay Franchisee' s necessary relocation or
adjustment costs of its water and/or sewer facilities on private property if required as part of project
construction when the property will become City property.
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B. Five Years after Completion of the Project. The City agrees to pay Franchisee's
necessary relocation costs of its water and/or sewer facilities for five years after completion of the
project in the event a City public project requires the relocation. Completion of the project means the
action taken by the City Council during the regular City Council meeting to accept the project as
complete.
3.3 Operation costs. To the extent permitted by law and as otherwise expressed in this
agreement, Franchisee shall be solely responsible for the operation, maintenance, repair, and
construction of its Facilities.
3.4 Facilities Abandonment. Franchisee will notify the City when a Facility has been
deemed obsolete and its use discontinued. The Facility shall be removed by Franchisee, at its
expense, within one hundred (180) days of the date the Facility's use is discontinued. The City may
deem a Franchisee's facility obsolete if the Facility ceases to be operational for more than ninety (90)
days and the Franchisee has not initiated repair or removal. If Franchisee fails to begin repair or
remove the Facility, the City or its agent may cause the Facility to be removed pursuant to Section 14
of the Franchise; however, with the express written consent of the City, Franchisee may leave such
Facilities in place. The City' s consent shall not relieve Franchisee of the obligation and/or costs to
subsequently remove or relocate such Facilities at the City's request, in which case Franchisee shall
perform such work at no cost to the City in accordance with Section 15. The provisions of this
Section shall survive the expiration, revocation or termination of this Franchise.
Section 4. Term.
Subject to Franchisee filing its acceptance pursuant to Subsection 2.2, the term of this
Franchise shall be for a period of ten (10) years commencing on the effective date of this Franchise,
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unless terminated earlier pursuant to the terms of this Franchise or other applicable law. This
Franchise may be extended by mutual written agreement of the parties for two (2) extensions of five
(5) years.
Section 5. Hydrant (Fire Suppression System) costs.
The parties agree that during the term of the Franchise, Franchisee shall be responsible to
operate and maintain all portions of the water system, including the fire hydrants (fire suppression
system) and those components of the water system that provide fire suppression benefits within City
boundaries. The City shall, during the term of this Franchise, pay Franchisee for the cost of
maintaining the fire hydrants and those portions of the system that provide fire suppression benefits
within City boundaries ( "fire hydrants "). Franchisee shall, during the term of this Franchise,
indemnify and hold the City harmless from any costs associated with the maintenance of the water
system, except the cost of maintaining the fire hydrants (fire suppression system). The amount of the
charge for the cost of maintaining the fire hydrants (fire suppression system) shall be as established
by Franchisee resolution. The parties agree that Franchisee shall begin charging and billing the City
for the fire hydrant (fire suppression system) costs after June 30, 2016. The fire hydrant (fire
suppression system) costs shall be billed to the City on a quarterly basis. Payment shall be due within
forty -five (45) days from the invoice date.
Section 6. Location of Facilities
6.1 Location. The location of existing Facilities, their depths below the surface of ground
or grade of a right -of -way (if available), shall be submitted to the City in the form of a map showing
the approximate location of Franchisee's existing water and sewer systems within the Franchise
Area. Upon written request of the City, Franchisee shall update such map to reflect actual or
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anticipated improvements to the Franchisee's water and sewer systems within the Franchise Area.
Any such map (or update thereof) so submitted shall be for City informational purposes only and
shall not obligate Franchisee to undertake any specific improvements, nor shall such map be
construed as a proposal to undertake any specific improvements.
6.2 GIS Data. The Franchisee shall provide, at such time as Franchisee develops and
employs Geographic Information System ( "GIS ") technology for its water and sewer system maps
and records throughout its service area, information required in section 6.1 in digital GIS format for
its Facilities within the Franchise Area.
6.3 Design Markings. In the event the City desires to design new streets or intersections,
renovate existing streets, or make any other public improvements, Franchisee shall at the City's
reasonable request, provide the location of Franchisee's underground Facilities within the Franchise
Area by either field markings or by locating the Facilities on the City's design drawings, and shall
provide all other reasonable cooperation and assistance to the City.
6.4 No Warranty or Waiver. Nothing herein is intended to expand, or relieve the parties
of, their respective obligations arising under Chapter 19.122 RCW or other applicable law with
respect to determining the location of utility facilities prior to construction. Further, neither the
provisions of this Franchise nor the absence of any specific provision in this Franchise is intended to
limit, detract from or render ineffective any disclaimer (including, without limitation, any disclaimer
as to accuracy or completeness) placed by Franchisee on any map furnished to the City pursuant to
Sections 6.1 and 6.2 of this Franchise.
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Section 7. Noninterference of Facilities
Franchisee agrees to maintain its Facilities and perform all work within the Franchise Area:
(1) so as not to unreasonably interfere with the free passage of traffic, (2) in accordance with the laws
of the State of Washington and City ordinances, regulations, resolutions, and rules, and (3) as
required by the Director.
Section 8. Requirement to Obtain Permits
8.1 Permits. Franchisee shall, at its expense, obtain all permits (including rights -of -way
permits) and pay all fees required by applicable City ordinances, regulations, resolutions, and rules
prior to commencing any work within the Franchise Area, excluding blanket permits for water and
sewer routine maintenance work. Permit applications shall: (1) show the position and location of the
Facilities to be constructed, laid, installed, or erected at that time; (2) show their relative position to
existing rights -of -way or property lines upon prints drawn to scale, unless otherwise approved by the
Director; (3) designate rights -of -way by their names and; (4) show improvements as required by the
Director, such as, but not limited to, sidewalks, curbs, gutters, shoulders of roadway, ditches, paved
roadways, roadways to property lines, turnouts, parking strips, telephone or electric distribution
poles, and pipes existing on the ground to be occupied. The Franchisee shall specify the class and
type of materials to be used, equipment to be used, and mode of safeguarding and facilitating the
public traffic during construction. The manner of excavation, construction, installation, backfill, and
temporary structures such as, but not limited to, traffic turnouts and road obstructions shall meet the
standards of the FWRC and be satisfactory to the Director. All traffic control shall be in accordance
with the right -of -way permit, and shall be in accordance with the Manual on Uniform Traffic Control
Devices ( "MUTCD "). The Franchisee shall indicate on the right -of -way use permit application the
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time needed to complete the work. The time needed to complete the work is subject to approval by
the City as a condition of the issuance of the right -of -way permit.
8.2 Exception to Permit Requirement. In the event of an emergency in which Franchisee's
Facilities within the Franchise Area are in a condition as to immediately endanger the safety or health
of life, property or the environment, Franchisee may take action immediately to correct the
dangerous condition without first obtaining any required permit so long as: (1) Franchisee informs
the City of the nature and extent of the emergency and the work to be performed prior to or at the
commencement of the work, if reasonably possible, or immediately following cessation of the
emergency; and (2) such permit is obtained by Franchisee as soon as practicable thereafter.
8.3 Routine Maintenance. Franchisee shall have the right to conduct routine maintenance
to repair, modify, supplement, replace or upgrade the Franchisee' s Facilities, provided that the
Franchisee shall obtain any necessary right -of -way use permit and any other permits or
authorizations required by all applicable federal, state, and local laws, rules, and regulations prior to
the performance of any said routine maintenance. The following non - emergency related activities
such as water main flushing, valve exercising, sanitary sewer line cleaning/inspection, and other
activities as approved shall be allowed to occur under an annual maintenance blanket permit.
8.4 Notice of Entry. At least forty -eight (48) hours prior to entering right -of -way adjacent
to private property to perform the installation, maintenance, repair, reconstruction, or removal of
facilities, except those emergency activities exempted from permit requirements, a written notice
describing the nature and location of the work to be performed shall be communicated to the private
property occupant to be impacted by Franchisee's work. Examples of acceptable notice include but
are not limited to a pre - printed door hanger, mailed letter, and/or sandwich boards.
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Section 9. Standard of Performance
The Franchisee shall not excavate for a distance of more than one hundred feet (100') without
immediately backfilling and compacting to surface grade and permit requirements. Backfilled trench
areas within a driving lane must be patched, either temporarily or permanently, or plated, before the
end of the workday in which they have been opened. Trench areas within the right -of -way, but not
within a driving lane, must also be plated, patched backfilled, and/or patched within the time limits
specified by the City on the right -of -way use permit. Final surface restoration shall be completed
within thirty (30) days and shall be equal to or better than the surface condition prior to permit
issuance.
Any asphalt overlay completed within the Franchise Area during a five (5) year period
immediately prior to the date of permit application shall not be open cut by Franchisee unless
required by an emergency or as approved by the Director. In the event of this emergency cut in new
pavement, Franchisee shall install new asphalt overlay on the street that is open cut, for a minimum
of 250 feet in both directions from the open cut, or pay a mitigation fee, or as determined otherwise
by the Director.
Franchisee shall, in carrying out any authorized activities within the Franchise Area, comply
with all applicable laws, ordinances, codes, and standards, as now existing or hereafter adopted or
amended, and shall comply with the terms of this Franchise, whether the work is performed by the
Franchisee, its agents, employees, subcontractors, or other third parties at Franchisee's direction.
Upon completion of any installation of Franchisee's Facilities within the Franchise Area, Franchisee
shall submit to the Director plans, stamped by a Professional Engineer licensed by the State of
Washington (if required in the permit), showing the "as- built" location of the Facilities. Nothing
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herein is intended to relieve the parties of their respective obligations arising under applicable law
with respect to determining the location of utility facilities.
Section 10. Survey Markers and Monuments
Franchisee shall, using a licensed surveyor, immediately replace all markers or monuments
disturbed during any work by Franchisee within the Franchise Area. Franchisee shall pay all costs
associated with such lost, destroyed or disturbed monuments or markers.
Section 11. Surface Markings /Stakes
Prior to Franchisee commencing any excavation work within the Franchise Area that disturbs
any monument or marker, Franchisee shall, using a licensed surveyor, reference all monuments and
markers relating to subdivisions, plats, highway, and other surveys. The reference points shall be
located so that they shall not be disturbed during the Franchisee's operations under this Franchise.
The method referencing these monuments or other points shall be approved by the City before
placement. The construction shall be made as expeditiously as conditions permit, and as directed by
the City. The cost of monuments or other markers lost, destroyed, or disturbed, and the expense of
replacement of the monuments, shall be borne solely by the Franchisee. A complete set of reference
notes for monuments, markers, and other ties shall be filed with the City. In the event of any conflict
or inconsistency between this Section 11 and Chapter 19.122 RCW, as now existing or hereafter
amended, Chapter 19.122 RCW will control.
Section 12. Notification to Fire District
Except in emergencies, if it is necessary to shut down or diminish the water pressure so that
fire hydrants may be adversely affected, the Franchisee shall notify the appropriate fire district by
telephone followed by faxed transmittal or written notification, that water pressure or fire flow
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conditions have been affected. In case of an emergency, Franchisee shall contact the appropriate fire
district as soon as circumstances allow. In case of a planned shutdown or diminished water flow, at
least forty -eight (48) hour prior notification to the fire district is required. If more than one fire
hydrant is affected, Franchisee must provide a map of the affected area to the fire district.
Section 13. Right of City to Undertake Maintenance Work
The laying, construction, maintenance, and operation of Franchisee's system of water and
sewer pipes, and appurtenances granted under this Franchise shall not preclude the City, its
accredited agents or its contractors from doing necessary maintenance work contiguous to the
Facilities, provided that the Franchisee shall have sufficient notice of blasting, regrading, or
excavating in order that Franchisee may protect its lines or pipe or property.
Section 14. Right of City to Complete Work
In the event Franchisee fails to comply with any applicable federal, state, or City laws,
ordinances, rules, regulations, or standards or with any of the terms of this Franchise, and such
noncompliance continues for a period of fourteen (14) days after Franchisee receives written notice
from the City regarding the noncompliance, the City may, but in no event is the City obligated to,
order any work completed, including without limitation Franchisee's obligation to repair pursuant to
Section 16 herein and Franchisee's obligation to remove facilities pursuant to Section 15 herein. If
the City causes such work to be done by its own employees or by any person or entity other than
Franchisee, the City will notify the state Department of Health or Department of Ecology, as
appropriate, prior to such work. The Franchisee shall, upon the City's written request, immediately
reimburse the City for all reasonable costs and expenses incurred by the City in having such work
performed, which costs may include the City's reasonable overhead expenses and attorneys' fees.
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Section 15. Required Relocation of Facilities
15.1 City Reservation of Rights. The City reserves the right to use, occupy and enjoy the
Franchise Area for any purpose that is not inconsistent with the terms and conditions of this
Franchise. The Rights reserved herein include, without limitation, the construction of any City
owned electrical, water, sewer or storm drainage line, installation of traffic signals, street lights,
trees, landscaping, bicycle paths and lanes, equestrian trails, sidewalks, other pedestrian amenities,
and other public street improvement projects. This Franchise is not an exclusive franchise. Without
limiting Franchisee's rights under this Franchise, this Franchise shall not in any manner prohibit the
City from granting other and further franchises in, under, over, upon, and along the Franchise Area.
15.2 City's Duties. In the event the City undertakes any work, including necessary
maintenance within a right -of -way in which Franchisee's Facilities are located, and such work
necessitates the relocation of Franchisee's then existing Facilities within the Franchise Area, the City
shall:
(a) Provide written notice to Franchisee requesting such relocation within a
reasonable time prior to the commencement of such City work;
(b) Pursuant to RCW 35.21.905, consult with Franchisee on projects that will
require relocation to facilitate coordination of design;
(c) Provide Franchisee with copies of pertinent portions of the City's plans and
specifications for such City work so that Franchisee may relocate its Facilities to
accommodate such City work; and
(d) Coordinate to minimize conflicts between existing Facilities and Franchise
Area improvements where possible.
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15.3 Franchisee's Duties. After receipt of the City notice requesting the relocation of the
Facilities pursuant to Subsection 15.2(a) and receipt of the plans and specifications pursuant to
Subsection 15.2(b), Franchisee shall, within such reasonable time as approved by the Director, raise,
lower, or move such Facilities within the Franchise Area at its sole cost and expense so as to
conform to such new grades as may be established, and place the pipe in a location or position
causing the least interference with the improvement, repair, or alteration contemplated by the City.
15.4 Exclusivity. Except as provided in Section 3.2 above, this Section 15 shall govern all
relocations of Franchisee's Facilities required in accordance with this Franchise. Nothing in this
Section 15 shall require Franchisee to bear any cost or expense in connection with the location or
relocation of any Facilities existing under benefit of easement on property owned by a person or
entity other than the City.
Section 16. Damage Repair
In case of damage by the Franchisee or by the Facilities of the Franchisee to rights -of -way, or
to public and private improvements to rights -of -way, the Franchisee agrees to repair the damage at its
own cost and expense. The Franchisee shall, upon discovery of such damage, immediately notify the
City. The City will inspect the damage, and set a time limit for completion of the repair. If the City
discovers damage caused by the Franchisee to rights -of -way, or to public and private improvements
to rights -of -way, the City shall give the Franchisee notice of the damage and set a time limit so the
Franchisee may repair the damage. In the event the Franchisee does not repair a right -of -way or an
improvement to a right -of -way as required in this section, the City may repair the damage pursuant to
Section 14 of this Agreement. The parties agree that they shall cooperate to investigate the cause of
any damage to the right -of -way. The City shall hold Franchisee responsible for damage that is
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determined, to a reasonable degree of certainty, to have resulted from issues with Franchisee's
Facilities or the actions of Franchisee.
Section 17. Franchise Fee and Utility Tax
17.1 The City levies a Franchise fee pursuant to this Franchise agreement to ensure that the
City's transportation, landscape, drainage, and storm water system infrastructure is maintained and
preserved during the ongoing operation of utility work in the City. Utility work within the City's
right -of -way causes a deterioration of the right -of -way and requires the City to perform annual
maintenance and longer -term capital improvements to maintain and preserve the City's right -of -way
infrastructure. Administration of this Franchise, and annual maintenance and preservation work
includes the work and cost for City employees, materials, engineering, inspection, administration of
the Franchise agreement, planning, electronic mapping, pavement management, and other outside
services for shoulder maintenance, street drain maintenance, roadside maintenance, street overlays,
sweeping and mowing, and street and drainage capital projects.. If the City adopts a utility tax
applicable to Franchisee, and Franchisee makes the payments to the City contemplated by such a
utility tax, then the Franchise fee will be cancelled effective the beginning date for the utility tax.
17.2 In consideration of the rights granted to Franchisee by this agreement, Franchisee
agrees:
(a) To collect and distribute to the City a Franchise fee equal to 3.6 percent of
Revenue generated within the City as defined in this agreement for 2016 -19, 3.8 percent for
2020 -23, and 4.0 percent for 2024 -26. The parties agree that Franchisee shall begin charging
the Franchise fee with billings issued after June 30, 2016. The Franchise fee shall be paid on
a monthly basis, with the first payment due July 15th and subsequent payments due the 15th
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day of each month thereafter throughout the Franchise term. The amount of the monthly
payment will equal the total Franchise fee owed during the prior year divided by twelve
(2016 payments shall initially be based on 2015 revenues). It is agreed that by the thirtieth
day following the end of the year, Franchisee shall calculate the actual Franchise Fee owing
during the prior year and the amount of any underpayment shall be submitted to the City with
the second payment of the year, or the amount of any overpayment shall be returned to the
Franchisee within forty five (45) days of the date the amount is invoiced to the City. No
interest shall accrue on any overpayment or underpayment owed pursuant to this section.
(b) Should Franchisee be prevented by judicial or legislative action from
collecting a Franchise fee on all or part of Franchisee's Revenue, Franchisee shall be excused
from the collection and distribution of that portion of the Franchise fee.
(c) Should a court of competent jurisdiction declare, or a change in law make the
Franchise fee invalid, in whole or in part, then Franchisee's obligation to collect and
distribute the Franchise fee contemplated under this section shall be temiinated in accordance
with and to the degree required to comply with such court or legislative action.
(d) Franchisee agrees that it will not pursue any legal challenge to the Franchise
fee established under this Franchise.
(e) Upon the City' s request, Franchisee shall make available Franchisee's books
and records pertaining to all revenue derived by the Franchisee by virtue of the Franchise for
City review, to verify the accuracy of payments. The City shall maintain the confidentiality of
such information to the extent permitted by law.
17.3 In consideration for the Franchise fee collected and distributed to the City by
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Franchisee, the City agrees:
(a) To pay Franchisee for the cost of maintaining the fire hydrants (fire
suppression system) within City boundaries as discussed in Section 5 of this Franchise.
(b) To forego, during the term of the Franchise, the initiation of any proceedings
under Chapter 35.13A RCW to assume the water and /or sewer service jurisdiction of
Franchisee. Should a court of competent jurisdiction declare, or a change in law make the
Franchise fee invalid, in whole or in part, then the assumption forbearance shall be cancelled
and this Subsection 17.3(b) shall be stricken from the agreement.
(c) To bear the cost of the Puget Sound Energy streetlights located in the right -of-
way within City boundaries currently paid for by Franchisee and billed to Franchisee's
customers after June 30, 2016.
(d) If a lawsuit is filed challenging the Franchise fee, the City agrees to defend
and hold Franchisee harmless from the cost/liability of such a lawsuit.
17.4 If the Franchise fee is declared invalid, in whole or in part, the parties agree to meet to
discuss alternatives and amendments to this Franchise to retain the essential purposes of this section.
Section 18. General Maintenance of Facilities
Franchisee will maintain Facilities located within the Franchise Area in good operating
condition and repair in a manner consistent with applicable law and prudent utility practice, and will
comply with the following procedures:
(a) Franchisee will provide the City, on an annual basis upon the City's written
request, a proposed schedule of its routine Facility replacement or repair activities within the
Franchise Area.
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(b) Franchisee will meet, at least annually upon the City's written request, with a
City representative to discuss the City' s concerns regarding the timing, scope, nature, or
method of such repair or replacement activities within the Franchise Area.
Section 19. Emergency Operations
Prior to the beginning of each winter storm season, Franchisee will, at the request of the City,
attend an annual coordination meeting with the City to discuss Franchisee' s Emergency Response
Plan. At the request of the City, a copy of those portions of Franchisee's Emergency Response Plan
that Franchisee makes generally publicly available will be provided to the City at the coordination
meeting, along with appropriate telephone number and pager numbers during each emergency.
Section 20. Default
20.1 Notice of Default. If Franchisee shall fail to comply with any of the provisions of this
Franchise, the City may serve a written notice to Franchisee ordering such compliance and
Franchisee shall have sixty (60) days from the receipt of such notice in which to comply.
20.2 Revocation of Franchise. If Franchisee is not in compliance with this Franchise after
the expiration of the sixty (60) day period, the City may, by ordinance, declare an immediate
forfeiture of this Franchise; provided, however, if any failure to comply with this Franchise by
Franchisee cannot reasonably be corrected with due diligence within such sixty (60) day period
(Franchisee's obligation to comply and to proceed with due diligence being subject to unavoidable
delays and events beyond its control), then the time within which Franchisee may so comply shall be
extended, upon notice to the Director, for such time as may be reasonably necessary and so long as
Franchisee commences promptly and diligently to effect such compliance. In the event of the City's
Ordinance No 16 -815 Page 18 of 30
cancellation of this Franchise, all rights and obligations associated therewith, including the
Franchisee's obligation to pay a Franchise fee, shall be terminated.
Section 21. Limited Rights
This Franchise is intended to convey only a limited right and interest to Franchisee in the
Franchise Area. This Franchise is not a warranty of title or conveyance of any ownership interest in
or to the Franchise Area to Franchisee.
Section 22. Eminent Domain
The existence of this Franchise shall not preclude the City from acquiring by condemnation,
in accordance with applicable law, all or a portion of Franchisee's Facilities within the Franchise
Area for the fair market value thereof. In determining the value of such Facilities, no value shall be
attributed to the right to occupy the Franchise Area conferred by this Franchise.
Section 23. Vacation
If at any time the City, by ordinance, vacates all or any portion of public streets, roads and /or
rights -of -way within the Franchise Area, the City will not be liable for any damages or loss to the
Franchisee by reason of such vacation. The City agrees to exert reasonable good faith efforts to
reserve an easement for Franchisee's existing or proposed Facilities when a street, public way, or
area is vacated. The City may, after thirty (30) days' written notice to Franchisee, terminate this
Franchise with respect to any such vacated area.
Section 24. Compliance with Laws
Franchisee shall comply with all applicable federal, state, and City laws, ordinances,
resolutions, regulations, standards and procedures, as now existing or hereafter amended or adopted,
including without limitation the State Environmental Protection Act; the Federal Occupational Safety
Ordinance No 16 -815 Page 19 of 30
and Health Act of 1970 ( "OSHA "), and the Washington Safety .and Health Act of 1973 ( "WISHA ")
provided, however, that if any term or condition of this Franchise and any term or condition of any
City law, code, ordinance, resolution, regulation, standard, procedure, permit, or approval are in
conflict, the term or condition of this Franchise will control.
Section 25. Guarantee
Franchisee shall guarantee work completed by the Franchisee after the date of this franchise
for a period of twenty (20) years from completion against settlement or conditions requiring repair.
Section 26. Charge for Administrative Costs
Nothing herein shall preclude the City from recovering any administrative costs incurred by
the City in the approval of permits or in the supervision, inspection or examination of all work by
Franchisee in the Franchise Area as prescribed in accordance with applicable provisions of the City's
code.
Section 27. Indemnification
Franchisee agrees to indemnify and hold harmless and defend the City, its elected officials,
officers, employees, agents, and volunteers from any and all claims, demands, losses, actions and
liabilities (including costs and all attorneys' fees) to or by any and all persons or entities, including,
without limitation, their respective agents, licensees, or representatives, arising from, resulting from,
or connected with this Franchise to the extent caused in part or in whole by the acts, errors or
omissions of the Franchisee, its officers, partners, shareholders, agents, employees, or by the
Franchisee's breach of this Franchise. This Section shall not be construed to require Franchisee to
indemnify, hold harmless or defend the City against claims or damages arising from the negligence
of the City, its agents, or employees. In the event any claim, demand, suit or action is commenced
Ordinance No 16 -815 Page 20 of 30
against the City that constitutes an obligation of Franchisee pursuant to this Section 27, the City shall
promptly notify Franchisee thereof, and Franchisee shall defend any such claim, demand, suit or
action. Franchisee shall not settle or compromise any such suit or action except with prior written
consent of the City, which shall not be unreasonably withheld. The City shall have the right at all
times to participate through its own attorney in any suit or action which arises pursuant to this
Franchise when the City determines that such participation is required to protect the interest of the
City or the public. In the event it is determined that RCW 4.24.115 applies to this Franchise,
Franchisee agrees to defend, hold harmless and indemnify the City to the maximum extent permitted
thereunder, to the full extent of Franchisee's negligence.
Section 28. Insurance
28.1 Minimum Limits. The Franchisee agrees to carry as a minimum, the following
insurance, in such forms and with such carriers as are satisfactory to the City.
(a) Workers compensation and employer's liability insurance in amounts
sufficient pursuant to the laws of the State of Washington;
(b) Commercial general liability insurance with limits of liability not less than
$5,000,000 each occurrence and $5,000,000 aggregate for bodily injury, including personal
injury or death, products liability, contractual coverage, operations, explosion, collapse,
underground and property damage; and
(c) Automobile Liability insurance with limits of liability not less than
$5,000,000 each accident for bodily injury, or death and property damage.
28.2 Mandatory Insurance Provisions. The commercial general liability insurance and
automobile liability insurance policies shall be endorsed to contain the following provisions:
Ordinance No 16 -815 Page 21 of 30
(a) The City, its officers, elected officials, employees, and volunteers are to be
named as additional insured;
(b) Coverage shall apply separately to each insured against whom claim is made
or suit is brought, except with respect to the limits of the insurer's liability;
(c) Coverage shall not be suspended, canceled, modified or reduced except after
thirty (30) days' prior written notice to the City delivered by certified mail, return receipt
requested; and
(d) Coverage shall be primary as to the City, its officers, officials, employees, and
volunteers. Any insurance or self - insurance by the City, its officers, officials, employees, or
volunteers shall be in excess of Franchisee' s required insurance.
28.3 Verification of Coverage. Franchisee shall furnish the City with certificates of
insurance and original endorsements evidencing the coverages required by this Section. The
certificates and endorsements shall be signed by a person authorized by the insurer to bind coverage
on its behalf and must be received and approved by the City annually. At the City's request,
Franchisee shall deliver certified copies of all required insurance policies.
28.4 Self - Insurance. In satisfying the insurance requirements set forth in this Section,
Franchisee may self - insure against such risks in such amounts as are consistent with good utility
practices. Franchisee shall provide the City with sufficient written evidence, upon request, that such
insurance (or self - insurance) is being so maintained by Franchisee. Such written evidence shall
include, to the extent available from Franchisee' s insurance carrier, a written certificate of insurance
with respect to any insurance maintained by Franchisee in compliance with this Section.
Ordinance No 16 -815 Page 22 of 30
Section 29. General Provisions
29.1 Entire Agreement. This Franchise contains all of the agreements of the Parties with
respect to any matter covered or mentioned in this Franchise and no prior agreements or
understandings pertaining to any such matters shall be effective for any purpose.
29.2 Modification. No provision of this Franchise may be amended or added to except by
agreement in writing signed by both of the Parties.
29.3 Assignment. Franchisee shall not have the right to transfer or assign, in whole or in
part, any or all of its obligations and rights hereunder without the prior written consent of the City,
which consent will not be unreasonably withheld. Any assignee shall, within thirty (30) days of the
date of any approved assignment, file written notice of the assignment with the City together with its
written acceptance of all terms and conditions of this Franchise. Notwithstanding the foregoing,
Franchisee shall have the right, without such notice or such written consent, to mortgage its rights,
benefits and privileges in and under this Franchise to the Trustee for its bondholders.
29.4 Attorneys' Fees. In the event the City or the Franchisee defaults on the performance of
any terms in this Franchise, and the Franchisee or the City places the enforcement of the Franchise or
any part thereof or the collection of any monies due, or to become due hereunder, in the hands of an
attorney, or files suit upon the same, the prevailing party shall be entitled to an award of all
reasonable attorneys' fees, costs, and expenses. The venue for any dispute related to this Franchise
shall be King County, Washington.
29.5 No Waiver. Failure of either party to declare any breach or default by the other party
immediately upon the occurrence thereof, or delay in taking any action in connection therewith, shall
not waive such breach or default, but such party shall have the right to declare any such breach or
Ordinance No 16 -815 Page 23 of 30
default at any time. Failure of either party to declare one breach or default, does not act as a waiver of
such party's right to declare another breach or default.
29.6 Governing Law. This Franchise shall be made in and shall be governed by and
interpreted in accordance with the laws of the State of Washington.
29.7 Authority. Each individual executing this Franchise on behalf of the City and
Franchisee represents and warrants that such individual is duly authorized to execute and deliver this
Franchise on behalf of the Franchisee or the City.
29.8 Notices. Any notices required to be given by the City to Franchisee or by Franchisee
to the City shall be delivered to the parties at the following addresses:
Franchisee: Lakehaven Utility District
Attn: General Manager
31627 1st Ave South
P.O. Box 4249
Federal Way, WA 98063
City: City of Federal Way
Attn: City Attorney
33325 8th Avenue South
Federal Way, WA 98003
Any notices may be delivered personally to the addressee of the notice or may be deposited in
the United States mail, postage prepaid, to the address set forth herein. Any notice so posted in the
United States mail shall be deemed received three (3) days after the date of mailing.
29.9 Captions. The respective captions of the sections of this Franchise are inserted for
convenience of reference only and shall not be deemed to modify or otherwise affect in any respect
any of the provisions of this Franchise.
Ordinance No 16 -815 Page 24 of 30
29.10 Remedies Cumulative. Any remedies provided for under the terms of this Franchise
are not intended to be exclusive but shall be cumulative with all other remedies available to the City
at law, in equity, or by statute.
Section 30. Severability
Should any section, subsection, paragraph, sentence, clause, or phrase of this Franchise, or its
application to any person or situation, be declared unconstitutional or invalid for any reason, such
decision shall not affect the validity of the remaining portions of this Franchise or its application to
any other person or situation. The City Council of the City of Federal Way hereby declares that it
would have adopted this Franchise and each section, subsection, sentence, clauses, phrase, or portion
thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses,
phrases, or portions be declared invalid or unconstitutional.
Section 31. Ratification
Any act consistent with the authority and prior to the effective date of this Franchise is hereby
ratified and affirmed.
Section 32. Implementation
The terms of the previous Franchise and any amendments shall control until the effective date
of this Franchise.
Section 33. Effective Date
This Franchise shall take effect and be in full force thirty (30) days after its passage and
publication, according to law (see Effective Date below).
PASSED by the City Council of the City of Federal Way this 1St day of March, 2016.
Ordinance No 16-815 Page 25 of 30
ATTEST:
ERK, STEPHANIE C RTNEY, CMC
AP : 7• VED A TQ� AORM:
1
CITY ATT % E
FILED WITH THE CITY CLERK: 02/12/2016
PASSED BY THE CITY COUNCIL: 03/01/2016
PUBLISHED: 03/04/2016
EFFECTIVE DATE: 04/03/2016
ORDINANCE NO.: 16 -815
Ordinance No 16-815 Page 26 of 30
• •
ACCEPTANCE:
The undersigned hereby accepts all the rights and privileges of the above granted Franchise and
acknowledges that such rights and privileges are subject to and limited by all of the terms,conditions
and obligations contained therein.
wG
DATED this 22 day of wr (Iv , 2016.
LAKEHAVEN UTILITY DISTRICT
By:
Its: "
Ordinance No 16-815 Page 27 of 30
EXHIBIT A
Location of Facilities within Franchise Area
Ordinance No 16 -815 Page 28 of 30
LW Date: Marc, 2.10
City of Water Service City of Fexa€ Way
PO Box 9t18
Fh.x.st Way. Ws. x:.63
Federal Way Franchise Area II')2 3.835 -10);)
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Ordinance No 16-815
Page 29 of 30
Map Oar: March, 2010
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Ordinance No 16 -815
Page 30 of 30